ANDEAN PRECIOUS METALS REPORTS Q4/FY 2023 RESULTS; MEETS 2023 REVISED PRODUCTION GUIDANCE Production is expected to double in 2024 with full year inclusion of Golden Queen
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ANDEAN PRECIOUS METALS REPORTS Q4/FY 2023 RESULTS;
MEETS 2023 REVISED PRODUCTION GUIDANCE
Production is expected to double in 2024 with full year inclusion of Golden Queen
TORONTO, ON – March 27, 2024 – Andean Precious Metals Corp. (“Andean” or the “Company”)
(TSX-V: APM) (OTCQX: ANPMF) reported its operating highlights and financial results for the three and
twelve months ended December 31, 2023. All amounts are expressed in United States dollars, unless
otherwise noted (C$ refers to Canadian dollars).
This news release should be read together with Andean’s management discussion and analysis
(“MD&A”) and audited consolidated financial statements for the three and twelve months ended
December 31, 2023 (the “Financial Statements”), which are available under the Company’s profile on
SEDAR+ (www.sedarplus.ca) and on Andean’s website www.andeanpm.com.
“In just twelve months, we have significantly advanced our growth strategy and taken meaningful steps
to reposition the Company,” said Alberto Morales, Executive Chairman and Chief Executive Officer. “In
2023, San Bartolomé successfully transitioned to an oxide processor focused on increasing cash flow
generation. Last year we acquired Golden Queen, providing geographical diversi fication and adding a
producing gold and silver mine with expected upside opportunities. With the addition of a second
producing asset, we are poised to substantially increase our gold and silver production, while increasing
our operating cash flow.”
Mr. Morales continued, “While our team achieved significant milestones in 2023, we are just beginning
to reap the rewards of our efforts. At Golden Queen, our focus is on optimizing mine operations,
implementing a new mine plan, driving cost efficiencies, and delivering positive exploration results.
Meanwhile, at San Bartolomé, our goal is to improve operating cash flow following the completion and
commissioning of our FDF processing facility. As we think about 2024, our focus will be on streamlining
and enhancing our operations in Bolivia and the United States while actively seeking additional
acquisitions to sustain and accelerate our growth.”
Q4 2023 and Full Year 2023 Highlights
• Met revised full year 2023 production guidance of between 4.6 and 4.8 Moz AgEq
̶ The Company produced 4.7 Moz of silver equivalent (“AgEq”)1 in 2023, excluding Golden
Queen’s production of 0.5 Moz AgEq, or 6,528 oz gold equivalent (“AuEq”) 1, from
November 24, 2023 (the “Acquisition Date”) to December 31, 2023. Production for the
full year 2022 was 5.0 Moz AgEq.
1 Silver equivalent ounces include gold ounces and are converted to a silver equivalent based on a ratio of realized silver and gold prices
during the periods discussed. Gold equivalent ounces include silver ounces and are converted to a gold equivalent based on a ratio of realized
silver and gold prices during the periods discussed . Refer to the “Non -GAAP Financial Measures, Ratios and Supplementary Financial
Measures” section of the Company’s MD&A for the year ended December 31, 2023 for further detail.
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̶ Q4 2023 production was 1.2 Moz AgEq from San Bartolomé, excluding Golden Queen’s
production of 0.5 Moz AgEq, or 6,528 oz AuEq, from the Acquisition Date to December
31, 2023.
• Increased revenue; achieved record quarterly revenue in Q4 2023
̶ In Q4 2023, the Company achieved record quarterly revenue of $48.8 million from the
sale of 2.0 Moz AgEq at an average realized silver price of $24.42 per ounce, compared
with Q4 2022 revenue of $25.7 million from the sale of 1.2 Moz AgEq at an average
realized silver price of $21.19 per ounce.
̶ For the year ended December 31, 2023, revenue was $125.3 million, $17.3 million higher
than full year 2022. The increase of $17.3 million was primarily attributable to $13.3
million of incremental revenue from Golden Queen and $4.0 million from higher average
realized silver prices offset by lower sales at San Bartolomé.
• Higher gross operating income: The Company recorded gross operating income of $5.1
million and $14.2 million for Q4 2023 and full year 2023, respectively, compared to $1.1 million
and $9.7 million for Q4 2022 and full year 2022, respectively. Gross operating income for both
Q4 2023 and full year 2023 included $0.3 million for Golden Queen from the Acquisition Date to
December 31, 2023.
• Higher net income primarily due to $36.5 million gain recognized on bargain purchase
(“Purchase Gain”) of Golden Queen
̶ For Q4 2023, t he Company reported net income of $38.1 million, or $0. 24 per basic
share and $0.21 per diluted share for Q4 2023, compared to a net loss of $3.3 million,
or $0.02 per basic and diluted share for Q4 2022.
̶ For 2023, net income was $38.5 million, or $0.24 per basic and $0.22 per diluted share,
compared with a net loss of $10.1 million, or $0.06 per basic and diluted share in 2022.
• Increased net cash flow provided from operating activities : Net cash flow provided from
operating activities was $5.1 million for Q4 2023 and $4.2 million for full year 2023, compared
with net cash flow used in operating activities of $3.0 million and $2.7 million for Q4 2022 and
full year 2022, respectively.
• Earnings before interest, taxes, depreciation and amortization (“EBITDA”) 2: EBITDA was
$40.7 million and $ 50.2 million for Q4 202 3 and full year 202 3, respectively, compared to
negative EBITDA of $1.3 million and $1. 6 million for Q4 2022 and full year 2022, respectively .
The increase was mainly due to the $36.5 million Purchase Gain recognized on the acquisition
2 EBITDA and Adjusted EBITDA are measures of financial performance with no prescribed definition under IFRS and may not be comparable
to similar financial measures disclosed by other issuers . Refer to the “Non-GAAP Financial Measures, Ratios and Supplementary Financial
Measures” section of this press release for further detail, including a reconciliation of these metrics to the Financial Statements.
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of Golden Queen, an increase in sales volumes and a higher average realized silver price per
ounce sold.
• Adjusted EBITDA 2: Adjusted EBITDA recognized for Q4 2023 and full year 2023 were $7.9
million and $20.1 million, respectively, compared to negative $1.0 million and $3.5 million for Q4
2022 and full year 2022, respectively. The increase was primarily due to growth in sales volumes
and a higher average realized silver price per ounce sold and partially offset by an increase in
non-recurring corporate development costs.
• Executing on Growth Initiatives
(i) Acquired a 100% interest in Golden Queen and its Soledad Mountain mine and heap
leach operation from Auvergne Umbrella LLC.
̶ The Company’s consolidated financial statements include $13.3 million in
revenue and $0.4 million in net income before income tax from Golden Queen
from the Acquisition Date to December 31, 2023. Had the transaction been
completed on January 1, 2023, Golden Queen would have contributed revenue
of $91.3 million for the period of January 1, 2023 to December 31, 2023, and the
Company’s full year 2023 consolidated revenue would have been $216.7 million.
̶ Commenced post-acquisition plans to optimize operations of Golden Queen that
are expected to increase production, improve costs, and extend the mine life.
(ii) San Bartolomé has fully transitioned to a material processing operation with a focus on
sourcing high -grade, high margin material. Additionally, the Company expects to
commence processing tailings material from its fines disposal facility (“FDF”) in the first
half of 2024 . During 2023, San Bartolomé signed several long-term contracts for
oxidized material, including:
̶ In June 2023, signed a 24-month agreement to purchase 170,000 tonnes of high-
grade (average silver grade of 354 g/t) from the Alta Vista project owned by
Empresa Minera Bedrock S.R.L.
̶ In September 2023, signed an agreement with Silver Elephant Mining Corp .
granting Manquiri an exclusive right to purchase up to 800,000 tonnes (average
silver grade of 223 g/t) of oxide material from Silver Elephant’s Paca Silver Project
until January 31, 2029, or upon receiving the specified quantity.
(iii) A Preliminary Feasibility Study Technical Report for San Bartolomé Mine Bolivia, which
was filed on SEDAR+ on February 16, 2024, included an updated mineral resource and
mineral reserve estimate ; San Bartolomé’s life of operation is 4.6 years based on a
recoverable proven and probable reserve of 11.95 Moz with an average grade of 93 g/t
Ag.
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(iv) A Feasibility Study Update Technical Report on the Soledad Mountain Heap Leach
Project was filed on SEDAR+ on January 31, 2024. Golden Queen’s new life of mine
average annual production is expected to include up to 65,000 oz of gold and 466,000
oz of silver for 5 years.
• Balance sheet maintained for ongoing strategic growth
̶ The Company had total liquid assets of $72.8 million as at December 31, 2023, including
cash of $64.9 million, accounts receivable of $0.9 million, VAT certificates of $1.8 million
and $5.2 million of marketable securities. This compares with $90.4 million of total liquid
assets as at December 31, 2022, which included cash of $80.7 million, accounts
receivable of $0.2 million, VAT certificates of $4.1 million and $5.3 million in marketable
securities, translating into negative net debt. The reason for the decrease in liquid assets
is primarily due to the acquisition of Golden Queen, including an upfront cash payment,
debt repayment and capital expenditures.
̶ There were zero-cost collar contracts in place at December 31, 2023 for 300,000 ounces
of silver associated with San Bartolomé’s production. The zero-cost collar contracts were
written at an average put strike price of $23 per ounce of silver and an average call strike
price of $30 per ounce of silver, for 100,000 ounces per month for the period January-
March 2024.
̶ As at December 31, there were zero-cost collar contracts in place for 12,000 ounces of
gold relating to Golden Queen’s production. The zero-cost collar contracts were written
at an average put strike price of $2,000 per ounce of gold and an average call strike price
of $2,212 per ounce of gold, for 2,000 ounces per month for the period January-June
2024.
• Responsible operations : The Company reported no lost -time incidents and no negative
environmental issues during 2023.
• Normal Course Issuer Bid (“NCIB”)
̶ Pursuant to an NCIB commencing October 4, 2022 and expiring on October 3, 2023, the
Company repurchased and cancelled a total of 3,160,100 shares at an average purchase
price of C$0.79 per share for a total of $1.9 million (C$2.5 million).
̶ On December 21, 2023 , the Company renewed its NCIB . As of March 25, 2024, the
Company has repurchased 5,333,291 common shares at an average purchase price of
C$0.70 per share for a total of $2.8 million (C$3.7 million).
̶ Since the inception of its NCIB in the fall of 2022 , the Company has repurchased
8,493,391 common shares at an average purchase price of C$0.73 per share for a total
of $4.6 million (C$6.2 million).
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Summary of Financial and Operating Results
(In thousands except per share and per oz) Q4 20233 Q4 2022 Change FY 20233 FY 2022 Change
Financial performance
Revenue $ 48,821 $ 25,666 90% $ 125,324 $ 108,049 16%
Cost of sales 42,012 22,902 83% 105,892 91,133 16%
Depreciation and depletion 1,703 1,666 2% 5,231 7,212 (27%)
Gross operating income 5,106 1,098 365% 14,201 9,704 46%
Purchase Gain - Golden Queen 36,512 - 100% 36,512 - 100%
Net income (loss) after tax 38,076 (3,341) 1,240% 38,540 (10,091) 482%
Net income (loss) per share
̶ Basic 0.24 (0.02) 1,237% 0.24 (0.06) 482%
̶ Diluted 0.21 (0.02) 1,095% 0.22 (0.06) 439%
Net cash provided from (used in) operating activities 5,121 (2,985) 272% 4,166 (2,740) 252%
Free cash flow4 1,719 (3,381) 151% (1,851) (5,094) 64%
EBITDA4 40,718 (1,348) 3,121% 50,171 (1,583) 3,269%
Adjusted EBITDA4 7,863 (956) 922% 20,063 3,539 467%
Capital expenditures 3,402 246 1,283% 6,017 2,204 173%
Ending cash and cash equivalents 64,907 80,729 (20%) 64,907 80,729 (20%)
(In thousands except metal price per oz) Q4 20233 Q4 2022 Change FY 20233 FY 2022 Change
Operating highlights
Gold ounces produced
Golden Queen (oz) 5,108 - 100% 5,108 - 100%
San Bartolomé (oz) 710 184 286% 1,980 2,560 (23%)
Consolidated gold ounces produced (oz) 5,818 184 3,062% 7,088 2,560 177%
Gold ounces sold
Golden Queen (oz) 5,849 - 100% 5,849 - 100%
San Bartolomé (oz) 1,441 120 1,100% 1,856 2,341 (21%)
Consolidated gold ounces sold (oz) 7,290 120 5,975% 7,705 2,341 229%
Average realized gold price ($/oz) $ 2,028 $ 1,750 16% $ 2,023 $ 1,814 12%
Average market gold price ($/oz) $ 1,974 $ 1,727 14% $ 1,942 $ 1,801 8%
Silver ounces produced
Golden Queen (koz) 51 - 100% 51 - 100%
San Bartolomé (koz) 1,194 1,233 (3%) 4,511 4,788 (5%)
Consolidated silver ounces produced (koz) 1,245 1,233 1% 4,602 4,788 (4%)
Silver ounces sold
Golden Queen (koz) 57 - 100% 57 - 100%
San Bartolomé (koz) 1,336 1,201 11% 4,490 4,769 (6%)
Consolidated silver ounces sold (koz) 1,393 1,201 16% 4,547 4,769 5%
Average realized silver price ($/oz) $ 24.42 $ 21.19 15% $ 24.13 $ 21.76 11%
Average market silver price ($/oz) $ 23.20 $ 21.17 10% $ 23.35 $ 21.73 7%
Silver equivalent ounces produced
Golden Queen (koz) 479 - 100% 479 - 100%
San Bartolomé (koz) 1,255 1,250 1% 4,715 5,001 (6%)
Consolidated silver equivalent ounces produced (koz) 1,730 1,250 38% 5,194 5,001 4%
Silver equivalent ounces sold
Golden Queen (koz) 549 - 100% 549 - 100%
San Bartolomé (koz) 1,454 1,213 20% 4,643 4,965 (6%)
Consolidated silver equivalent ounces sold (koz) 1,999 1,213 65% 5,192 4,965 5%
3 Financial and operating results include Golden Queen from the Acquisition Date through to December 31, 2023. As Golden Queen was
acquired on November 24, 2023, there are no comparative 2022 figures.
4 Free cash flow, EBITDA and Adjusted EBITDA are measures of financial performance with no prescribed definition under IFRS and may not
be comparable to similar financial measures disclosed by other issuers . Refer to the “Non -GAAP Financial Measures, Ratios and
Supplementary Financial Measures” section of this press release for further detail, including a reconciliation of these metrics to the Financial
Statements.
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2024 Outlook and Guidance
This outlook includes forward -looking information about the Company’s operations and financial
expectations based on management’s expectations and outlook as of March 2 6, 2024. This outlook,
including expected results and targets, is subject to various risks, uncertainties, and assumptions
predicated on global economic conditions. Actual results may vary materially from management’s
expectations. See the “Forward -Looking Statements” and “Risks Factors” sections in th e Company’s
MD&A for the year ended December 31, 2023 for further information.
The Company’s guidance for its annual production, operating cost s and capital expenditure s is
discussed in detail below.
Production guidance
2024 Guidance +/- 5% Actual 2023 Revised guidance 2023
Golden Queen
Gold equivalent (koz)5 60 -
San Bartolomé
Silver equivalent (koz)5 5,000 4,715 4.6 million to 4.8 million
Consolidated
Silver equivalent (koz)6 10,429 -
Golden Queen
At Golden Queen, 2024 production is expected to be 6 0,000 AuEq (+/- 5%) based on current mining
plans and in line with the technical report issued in January 2024. As announced , the fire incident at
Golden Queen in December 2023 will impact its Q1 2024 production. However, production will ramp up
to between 1 5,000 oz AuEq and 18,000 oz AuEq on average per quarter from Q2 2024 to Q4 2024.
Total mine tonnage production is estimated at 26.8 million tonnes (+/ -5%) including 3.9 million tonnes
(+/-5%) of ore estimated to be stacked to the leach pad resulting in a strip ratio of 5.9:1. Mine ore grades
are estimated to average 0.805 g/t AuEq in 2024, a decrease from 0.869 g/t AuEq in 2023. Heap leach
crushing and stacking activities will add 3.9 million tonnes in 2024 to the pad resulting in production of
60,000 oz AuEq (+/-5%). Apparent recovery for 2024 is estimated at 63.2%.
San Bartolomé
Mining activities at San Bartolomé were suspended in Q3 2023. Production of 5.0 Moz AgEq is expected
to be derived mostly from third-party purchased material sourced primarily from Cachi Laguna, Cerro
Rico, Paca and other rural cooperatives. Material purchase s are negotiated for larger volumes and
longer-term contracts at prices and payment terms conditional on the nature and geology of each
5 Silver equivalent production and silver equivalent sales both include gold production and sales. Equivalent ounces are calcul ated using the
Company’s average realized gold and silver prices during the referenced period. For 2024 guidance commodity price assumptions supporting
this estimate are $21 per ounce of silver and $1,900 per ounce of gold. Refer to the “Non-GAAP Financial Measures, Ratios and Supplementary
Financial Measures” section of this press release for further detail.
6 Assuming gold equivalent ounces were calculated on a consolidated basis for the Company, the expected guidance of 10.4 Moz AgEq would
equate to approximately 1 15,000 oz AuEq. Gold equivalent production and gold equivalent sales both include silver production and sales.
Equivalent ounces are calculated using the Company’s average realized gold and silver prices during the referenced period. For 2024 guidance
commodity price assumptions supporting this estimate are $21 per ounce of silver and $1,900 per ounce of gold. Refer to the “Non -GAAP
Financial Measures, Ratios and Supplementary Financial Measures” section of this press release for further detail.
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deposit. When silver prices change significantly, new negotiations may occur in some instances, which
could impact the grade/price curve. Following the completion of the FDF project in the first half of 2024,
management is anticipating production of 0.8 Moz AgEq (+/- 5%) from the FDF in 2024. Total tonnes
milled in 2024 are expected to be 1.4 million tonnes (+/ - 5%), recovering 5.0 Moz AgEq (+/- 5%) at a
144 g/t head grade and a calculated recovery of 78% compared to the same recovery rate in 2023. The
increase in average grade is due to high-grade material from Cerro Rico, Paca and Cachi Laguna.
Consolidated
In 2024, on a consolidated basis, silver equivalent ounces production is expected to increase by 121%
to 10.4 Moz AgEq (+/- 5%) (115,000 gold equivalent ounces +/-5%). The increase is largely due to full
year production of 60,000 oz AuEq (+/- 5%), or 5.4 Moz AgEq (+/- 5%), expected from Golden Queen.
Cost guidance
With the acquisition of Golden Queen, the revenue split in 2024 is estimated to be 54% gold and 46%
silver. In addition, San Bartolomé’s operations no longer include mining activities, as it transitioned
exclusively to ore purchasing and processing during Q3 2023. Therefore, providing consolidated cost
guidance may not provide meaningful information for measuring key indicators of performance.
Below is the cost guidance for each of the Company ’s operations, based on their respective primary
metal contribution:
2024 Guidance +/- 5% Actual 2023
Golden Queen
Operating cash cost (“OCC”) per Au Eq oz produced,
on a by-product credit basis7 $ 1,500 -
All-in sustaining costs (“AISC”) per Au Eq oz sold,
on a by-product credit basis $ 1,750 -
San Bartolomé
Cash gross operating margin per Ag Eq oz produced8 $ 3.88 $ 2.71
Gross margin ratio9 19.5% 12.4%
7 Golden Queen’s OCC per gold equivalent ounce produced and AISC per gold equivalent ounce sold on a by -product credit basis were for
the period from the Acquisition Date to December 31, 2023. OCC and AISC are measures of financial performance with no prescribed definition
under IFRS and may not be comparable to similar financial measures disclosed by other issuers. Refer to the “Non-GAAP Financial Measures,
Ratios and Supplementary Financial Measures” section of this press release for further detail, including a reconciliation of these metrics to the
Financial Statements.
8 Cash gross operating margin per equivalent ounce sold is calculated by subtracting the average cash cost of sale ( cost of sales, excluding
depreciation, depletion and amortization), and business unit general and administration cost per equivalent ounces from the average selling
price per equivalent ounces. It is a measure of financial performance with no prescribed definition under IFRS and may not be comparable to
similar financial measures disclosed by other issuers . Refer to the “Non -GAAP Financial Measures, Ratios and Supplementary Financial
Measures” section of this press release for further detail, including a reconciliation of these metrics to the Financial Statements.
9 Gross margin ratio is calculated by subtracting the cost of sale, excluding depreciation, depletion and amortization , as reported in the income
statements from the revenue of equivalent ounces divided by revenue from sales of equivalent ounces. GMR is a measure of financial
performance with no prescribed definition under IFRS and may not be comparable to similar financial measures disclosed by other issuers .
Refer to the “Non-GAAP Financial Measures, Ratios and Supplementary Financial Measures” section of this press release for further detail,
including a reconciliation of these metrics to the Financial Statements.
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Golden Queen
OCC per gold equivalent ounce produced at Golden Queen is expected to be $1,500 (+/- 5%) in 2024.
The Company expects its AISC at Golden Queen to be $1,750 per gold equivalent ounce sold (+/- 5%)
for 2024.
San Bartolomé
As a result of the transition to exclusively processing activities during Q4 2023, silver equivalent ounces
produced from third-party material sources represent more than 98% and 78% for Q4 2023 and full year
2023, respectively, compared to 68% and 67% for Q4 2022 and full year 2022. The purchase price paid
to third-party material suppliers is impacted by several factors including precious metal spot prices, head
grade per tonne and material volume.
In evaluating the performance and profitability of San Bartolomé, management is adopting t wo new
metrics: cash gross operating margin (“CGOM”) per equivalent ounces and gross margin ratio (“GMR”).
These new indicators provide information on the gross amount of cash that could be generated from the
production or sale of one unit (oz) of silver equivalent. The Company believes CGOM and GMR metrics
are useful to investors because they provide insight into operational profitability relative to performance
on a period-by-period basis derived from purchase ore that is subject to unpredictable variable inputs.
These metrics are conceptually understood and reported in the tolling or processing industry.
In 2024, CGOM per silver equivalent ounce is expected to be $3.88 compared to $2.71 in 2023. GMR
is anticipated to be 19.5% in 2024 compared to 12.4% in 2023. The increase in CGOM and GMR is
largely attributable to the suspension of mining activities at the high-cost low margin Pallacos deposits.
During 2024, 76% of the silver equivalent ounces expected to be sold are from high -grade and high
margin material ore sources, including Paca and Alta Vista.
Capital expenditure guidance
In $’000s 2024 Guidance +/- 5% Actual 2023
Sustaining capital
Golden Queen $ 10,300 $ -
San Bartolomé 3,400 1,316
Total sustaining capital $ 13,700 $ 1,316
Growth capital
Golden Queen $ 9,500 $ -
San Bartolomé 840 4,211
Total growth capital $ 10,340 $ 4,211
Total capital
Golden Queen $ 19,800 $ -
San Bartolomé 4,240 5,527
Total capital expenditures $ 24,040 $ 5,527
Total capital expenditures are expected to be in the range of $24.0 million (+/-5%), largely due to the
$9.5 million included in the growth capital for the procurement of six new 785-8 haul trucks, as part of
the Company’s strategic mobile fleet replacement and mine optimization. Included in the sustaining